The current market trend is indeed confusing and puzzling!
However, I always hold a belief: there must be a deep reason in the anomaly.
1. The United States continues to maintain a high interest rate policy, and its willingness to cut interest rates has not yet been shown. This move is intriguing.
2. Under the high interest rate environment, the US financial market is under heavy pressure, and the bond and mortgage sectors are particularly vulnerable, and the economy faces severe tests.
3. It is worth noting that Japan has quietly taken action to sell off US bonds to save itself, while European and American commercial real estate mortgage bonds are also deeply mired in losses.
4. Every step of the Federal Reserve seems cautious, trying to cool down the risks it has buried. I predict that it is not sustainable for the United States to maintain high interest rates for a long time. As the debt burden increases, moderate monetary policy easing may become inevitable.
5. The market generally expects that the Federal Reserve may turn its attention to September this year and consider the possibility of a rate cut.
6. Looking back at 2024, the currency market has gradually warmed up since the end of last year and reached a staged peak in April this year. At present, many funds are still in a wait-and-see state, and the market potential has not been fully released, which means that the market is far from reaching its peak.
7. Historical experience shows that it may take time for the market to rise, and the downward adjustment is often longer. Therefore, facing the current market trough, we do not need to panic too much, and we should not give up easily.
8. I firmly believe that the market will gradually recover. Capital has not withdrawn, but is temporarily dormant, waiting for the opportunity to strike again. At this critical moment, keeping calm and patient will be the key to our crossing the fog and welcoming the dawn.
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